Horticulture, wine and fisheries to benefit from lowered backpacker tax rates
THE PROPOSED 32.5 per cent tax rate that was to apply to working holiday visa holders will be reduced to 19 per cent, the Federal Government announced today.
Assistant Minister for Agriculture and Water Resources, Senator Anne Ruston, said the 19 per cent rate would go a long way in continuing to attract the seasonal workforce necessary to cope with our peak labour demands.
“The Government recognises the essential role played by Australia’s Working Holiday Maker programme in our workforce, particularly across our agriculture and tourism sectors,” the Senator said.
“A 19 per cent tax rate will help maintain Australia’s status as a competitive destination for working holiday makers, while ensuring that they do pay their fair level of tax.
Senator Ruston said that while the approaching harvest season placed particular demands on the requirements for labour in primary industries, a viable itinerant workforce provided important year-round support to many primary producers.
“We’re heading into important harvest periods for cherries and berries in Tasmania, peaches and strawberries in Queensland and tomatoes and melons in Western Australia,” she said.
“Rock lobsters begin in November in Western Australia, scallop-splitting in January for Tasmania and fishing demands can peak around the country at any given time of the year.
“Today’s announcement will provide certainty, and confidence to our producers in the lead up to harvest getting their product from the paddock, the ocean and the orchard into the marketplace.”
The Senator made the point of emphasising that the Turnbull-led government has listened and has now delivered on this issue — an issue that is so fundamental not only to major sectors of our economy, but also to our competitiveness as a nation.
Cotton industry welcomes alteration to the Backpacker Tax
COTTON AUSTRALIA, the peak representative body for Australia’s cotton growing industry, has welcomed news the Australian Government has dropped its proposal to introduce a 32.5 per cent tax on visiting seasonal workers, commonly known as the ‘Backpacker Tax’.
“The Government today announced its planned Backpacker Tax has been wound back, and is to be replaced with a tax on working holidaymakers at 19 per cent for every dollar earned, plus an increase to the Passenger Movement Charge,” says Michael Murray, Cotton Australia’s General Manager.
“As we have maintained, the Backpacker Tax as originally proposed would have been disastrous for the cotton industry and many other agricultural sectors.”
“Many cotton growers rely on backpackers and other seasonal workers to ensure production at critical periods of the year, and our industry would have faced an extreme burden if the proposed Backpacker Tax had proceeded.”
“It is fair and reasonable that backpackers contribute to the nation’s tax base, and the revised working holidaymaker tax plan will allow Australia to remain competitive with other countries to attract seasonal labour.”
“Cotton Australia appreciates the support of the Government in amending its tax plan, and in particular that of Deputy PM Barnaby Joyce and local federal members who voiced the concerns of farmers.”
“The Government will need to introduce new legislation to implement the revised Backpacker Tax, and Cotton Australia looks forward to participating in that process to ensure the voice of growers is heard.”
Backpackers would no longer be discouraged — Growcom
PEAK HORTICULTURE BODY, Growcom, has expressed relief at the decision by the Federal Government to set the backpacker tax at 19 per cent from the first dollar earned from January 1, rather than 32.5 per cent.
Chief Advocate Rachel Mackenzie said that at this rate, Australia would be competitive with other working holiday destinations and backpackers would no longer be discouraged from working here.
The organisation also welcomed the government’s decision to raise the age limit for working holiday makers to 35 which was designed to attract backpackers in greater numbers.
Ms Mackenzie said that it was pleasing to see that the Federal Government had finally taken the deep concerns of the agricultural and tourism sectors seriously, even if it took two reviews and countless hours of lobbying to do so.
“The government has taken on board the warnings of the tax’s dire economic effects on horticultural growers and other small businesses in regional towns which are dependent on healthy backpacker numbers,” Ms Mackenzie said.
“Growers across Australia will be breathing a sigh of relief at this news and can finally make decisions about planting next year’s crop.
“We thank the number of rural MPs and Senators from all sides of politics who listened to our concerns and kept the issue on the agenda in Canberra.
“This sensible outcome is the result of concerted and collaborative lobbying on behalf of a number of industry organisations across agriculture and tourism and shows the benefit of working together to put forward a clear and consistent message.
“It seems to us far more reasonable to introduce the lower tax rate which will secure $315 million a year without losing backpackers. Horticulture growers can now make decisions about putting in crops with confidence that they will have numbers of workers to harvest them.”
Growcom also welcomes the additional $10 million funding for the ATO and the Fair Work Ombudsman (FWO) to establish an employer register and assist with ongoing compliance initiatives to address workplace exploitation of working holiday makers.
“We request that a budget allocation also be made to industry organisations to enable them to assist their grower members to understand these new requirements and meet their obligations to working holiday makers,” said Ms Mackenzie.
Other initiatives announced include:
- Reduction in the application charge for working holiday maker visas by $50 to $390.00
- Flexibility to allow an employer with farms in different regions to employ a WHM for 12 months (six months in each region)
- A $10 million global youth targeted advertising campaign to attract working holiday makers to Australia
- Once-off registration of employers with the Australian Taxation office to prevent exploitation of working holiday makers.
- Publication of the list of registered employers on the ABN Lookup website for working holiday makers to check.
Growcom notes that to offset the cost of the changes, the Government proposes increasing the tax on working holiday makers’ super payments to 95 per cent and increasing the Passenger Movement Charge by $5.00 from 1 July 2017.
Queensland Agriculture and Tourism welcome amendment to Backpacker Tax
THE QUEENSLAND Farmers’ Federation (QFF) and the Queensland Tourism Industry Council (QTIC) have today welcomed the Federal Government’s amendment to the proposed 32.5 per cent tax on working holiday makers, to 19 per cent from their first dollar earned.
The Government will also extend the eligibility age of the working holiday maker scheme from 30 to 35 years and implement a reduction to the application charge for working holiday maker visas by $50 (from $440 to $390).
Ten million has been allocated to the ATO and the Fair Work Ombudsman to establish an employer register and assist with ongoing compliance initiatives to address workplace exploitation of working holiday makers, and a further $10 million will be given to Tourism Australia to promote working holiday makers to come to Australia through a global youth targeted advertising campaign.
The Queensland agriculture and tourism sectors strongly urged the Federal Government to not impose an unfair tax rate on the important backpacker labour market.
QFF President Stuart Armitage said that he was relieved that the backpacker tax had been revised, as it restored the certainty farmers needed plant and harvest their crops.
“QFF and its industry members welcome the revised 19 per cent tax rate as it is consistent with what we and others in the agricultural sector have been calling for.”
“We welcome the lower tax rate as it will undoubtedly remove the confusion and uncertainly for backpackers and those farmers who need access to their labour.
Mr Armitage also thanked the broader community for joining the campaign against the uncompetitive backpacker tax, and for the Members of Parliament who spoke-up on behalf of their constituencies.”
“QFF commend the government for listening to regional Australia on this issue by ending the uncertainty already impacting Queensland regional areas that rely on backpackers to visit, holiday and work.”
QTIC CEO Daniel Gschwind welcomed the government’s modifications to the proposal, but stressed that the Australian tourism industry is still challenged to remain competitive in the backpacker market.
“QTIC welcome the government’s review and modifications to the proposal, amendments which represent an improvement from the previous proposal. It also welcomes the modest reduction to the application fee for working holiday maker visas, and for the expansion of the scheme from applicants aged up to 30 to now 35 years.”
“However, the now proposed tax rate which applies from the first dollar earned still positions Australia as uncompetitive compared to Canada, New Zealand and the United Kingdom for working holiday makers.”
He said also disappointing was the simultaneous announcement that the Government seeks to increase its consolidated revenue by adding a further $5 to the passenger movement charge, bringing it to $60 per passenger.
“QTIC thanks its membership and industry partners for their input and feedback on the Backpacker Tax proposal, and similarly the agricultural sector for its shared advocacy support,” Mr Gschwind said.
The Queensland Farmers’ Federation is the united voice of intensive agriculture in Queensland, representing a federation that promoting the interests of 17 of Queensland’s peak rural industry organisations, which in turn collectively represent more than 13,000 primary producers across Queensland.
The Queensland Tourism Industry Council (QTIC) is the state peak body for tourism in Queensland. QTIC is a private sector, membership-based tourism industry organisation. All of Queensland’s 13 Regional Tourism Organisations (RTOs) are members of QTIC, as are 20 industry sector associations and in excess of 3,000 regional members, operating in all sectors of the tourism industry.